How effective was development of the Europe economic in 1500 CE - Research Paper Example

?Up s occur every 1440 minutes. How Effective Was Development of the Europe Economy in 1500 AD Introduction Towards the end of the middle ages, there were a lot of conflicts within Europe. This turmoil propagated and accelerated change in Europe which began with growth of towns in the Middle Ages. Even though the people faced many challenges during this period, it paved a clear way for the modern institutions, values, and movements that emerged after 1450. The spirit of capitalism and attitudes towards profit became more complex, and there was a large movement that led to the change in perception of the secular world. The idea of states with a standing army and bureaucratic process began to take root, and this changed the world’s perspective of Europe. This paper will elaborate on the development of Europe economy in 1500 AD and illustrate how this period saw the advancement of technology by great inventions such as gunpowder, relatively advanced ships, improved navigation techniques, and the printing press would be the premise of change in Europe. Changes in Social Structure The chaos of the late middle Ages did not equally affect the inhabitants of Europe. Advancement in military technology and better pikemen in the battlefield challenged the dominance of the knights in battle; the title of being a noble began to reduce in value and stature. The Economic challenges of the Middle Ages saw an increased in labor shortages and this translated to higher prices of commodities (Acemoglu, Johnson and Robinson 57). The wealth belonging to the people In nobility was cut into by the high inflation of that time, and this was due to the static value of land which was the base of their wealth. A large number of peasants in Europe had attained the capacity to purchase their freedom from their lords; they began to pay a fixed amount of rent instead of paying them with labor. Due to the high inflation, the rent paid by the tenants was insufficient to satisfy their needs and therefore the value of nobility declined. Not all nobles were affected by inflation; some nobles sought employment from the king and were taken on to join the army or work as courtiers. A good number of people lost their nobility status from having involving themselves with agriculture and commerce like the middle class. Despite the loss in value, nobles were still held in high standing in society; for that reason, the now wealthy middle class began buying nobility titles from the king, surrendering their business oriented lives, settling in landed in landed estates. The provision of buying nobility titles enabled the noble class to be replenished despite its rapidly dwindling numbers. Western Europe did not have any peasants by 1500, most of the former peasants owned their own land by that time. In addition to that, the middle class was getting higher due to their increasing wealth and the positions held in the Kingdom. Recovery of the Economy Europe’s economic rebirth happened on the foundation of agriculture. The aftermath of the conflicts in the middle ages weakened the nobles and the church that had great influence on economic activities. The reduced influence of the church and nobles led to the emergence of well-structured monarchies in Western Europe that safeguarded peace encouraging the growth of commerce and trade. Peasant s that had not lost their lives in the Black Death inherited land belonging to the deceased and were able to improve their standards of living. Agricultural production standards rapidly rose due to the fact the former peasants worked on their own land and this motivated them to work harder than they did before. The improved standards of living and food security fueled an increase in population; it is estimated that the population rose to 70 million from 50 million fifty years earlier (Janssen 89). The economic recovery had a great trickle-down effect that cumulated to the creation of capitalist economic system. The effects were: 1. The rapid population growth had the implication that towns that were previously destroyed and trade could make rapid recovery as well and even attain a higher prosperity that had never been seen before. 2. The increased population meant that new markets were being created but unlike before the wealth was evenly distributed. With the nobility having lost their wealth, they were not able to acquire high end products from the guilds; they had become common laborers and peasants. In 1500, there emerged a new type of consumer that did not want to purchase high end goods made by the city guilds; instead they wanted to buy products made by peasants outside the city despite the fact of the lower quality (William and Spielvogel). This reduced dependency on rich businessmen facilitated the spread of consumer markets to parts that were uncharted and means of investment and production were not left to a few people. 3. The rapid economic growth necessitated the expansion of the local market, and this made the Portuguese and Spanish to find new trade routes to find spices in the east. The exploration expanded the volume of trade conducted by Europe. Business Practices Redefined Economic recovery had brought with it a larger volume of trade within Europe, it is this increased volume that necessitated development of new money handling techniques; Italian city state pioneered these techniques. They include 1. Insurance companies Purpose of insurance companies was to reduce risk resulting from any new business venture. Insurance companies encouraged people to invest rather than hoard money. 2. Joint stock companies The joint stock companies enabled people with little volumes of cash to take part in entrepreneurial opportunities. Like insurance companies, they were designed to encourage people not to hoard money, making it circulate in the economy. 3. Banks Banks allowed bankers to have more money to put into ventures. The idea of receiving interest on their deposits attracted investors. Banks also offered credit throughout Europe and the credit enabled businessmen to embark in new ventures that they didn’t have enough money at hand to engage in. The idea of credit also made doing business with large amounts of money over great distances very secure. A lot of robberies would take as traders move over long distances with money, with use of credit notes, cash in hand was eliminated. The innovative techniques worked together to create a mechanism that made Europe’s economic growth to accelerate. Money was being invested in new ventures and this increase in trade volume stimulated and increased production of goods and services. More jobs were created; people were willing and able to spend more and there was relatively more security. It was around this period that Arabic numerals were implemented in trade and this increased accuracy and reliability of the systems. From a broader perspective, the increasing prosperity and economic activities in Europe transformed the perceptions and attitudes towards money and this played a major role in the creation of Capitalism. Capitalism By definition, capitalism involves using large amounts of cash in large-scale agriculture, manufacturing, or commercial activities. Capitalism traces its origins to medieval time but it become more prevalent around 1500 (Broadberry and Bishnupriya 15). Capitalism has four main characteristics. 1. Law of supply and demand Previously, guilds managed the production process and this enabled them to keep the prices artificially fixed irrespective of the availability or scarcity of the commodity. The law enables prices of a commodity to adjust depending on prevailing market conditions. 2. Production means being private Guilds enjoyed monopoly and this gave them the power to stipulate the prices of commodities, a vey ineffective technique of business. 3. Profit motive Before capitalism, the church had banned charging a commodity more than a price that is deemed fair. With the advent of profit motive in business around 1500 values and attitudes of Europeans at the time changed. 4. Distinction between workers and capitalist With the spread of capitalism, the foundation for the rise of monarchies was laid. Monarchs had access to credit and this enabled them to build strong armies and also well equip the armies. A wave of change in Europe It is around the 1500s that the thoughts of the people began to change throughout Europe. The ideologies that were becoming widespread around this period are still in today’s society. These are skepticism, Individualism, humanism, and secularism. 1. Secularism Prior to the economic revolution, the civilization was greatly invested in religion and the idea of life after death. The economic changes made people more concerned with living for the moment rather than waiting for life after death as those were very interesting time to live in. The ideas of secularism was evident in art at that time, prior to the revolution, art depicted the glory of God but artist began to concentrate more on things that were around them. 2. Humanism Humanism goes hand in hand with Secularism where God is not the center of attention. Society began to look at the human form as art by its own right and they began to believe that they not only exist to glorify God. Human beings were now being perceived as intelligent creatures and not vessels to be manipulated by God. 3. Individualism The idea of individualism is an advancement of humanism and it instilled the idea that any man is capable of doing great things. The community oriented mentality was paving way to the idea that one could achieve great things on their own. This kind of thinking allowed great minds of their time like Leonardo da Vinci to live to their full potential. 4. Skepticism People began to question people in authority and this was directly linked to humanism, individualism, and secularism. People began to challenge the church’s theories and authority and this fueled scientific research which would eventually change Europe and eventually the world. These four ideas led to changes in a variety of fields including: science, learning, art, and protestant reformation. 1. Learning Prior to the economic revolution, all aspects of learning and literature were largely centered on religion. The number of educated people was increasing and after the invention of the printing press, enabled people to have more access to printed works. The influential people from the middle classes and nobility wanted a more practical approach to learning that was not primarily based on religion. New schools were built that offered a wider range of subjects that the church run schools did not offer. 2. Science During this period saw little advancement; this is not to belittle what society achieved then. Most of the work during this period set the premise for future developments. Most theories that were used by the church were disproven and this set the precedence for future scientific work. Protestants Humanistic and individualistic ideologies were increasingly growing. Skepticism of the church led to public challenging which paved the way to the birth of Protestants. The wave of change brought about by protestants had a great influence on political, social, scientific, and economic matters. Art Prior to the economic revolution art was very religious and was for the glory of God. Artist did not concentrate on detail and art become flat and without life. The revolution gave a chance for artist to express themselves and the quality of work eventually improved. Conclusion The Economic development of the European economy was quite effective; the foundation that was laid in 1500 remains to be the basis of today’s society. The economic development not only helped the people living during that period but it also changed humanity for the better. The exploitation of people through power of money was eliminated and the world became more habitable. Works Cited Acemoglu Daron, Johnson Simon and Robinson James. The Rise of Europe: Atlantic Trade, Institutional Change, and Economic Growth. The American Economic Review Vol. 95, No. 3 (Jun., 2005), pp. 546-57 Broadberry, Stephen and Bishnupriya Gupta. The early modern great divergence: wages, prices and economic development in Europe and Asia, 1500–18001. The economic history review 59.1 (2006): 2-31. Janssen Sarah. Change and Expansion in Europe: 1500-1700. The World Almanac and Book of Facts 2013, SIRS Issues Researcher, 2013. Print. William Duiker, J., and Spielvogel Jackson J. World History: Since 1500. Vol. 2. CengageBrain. com, 2012. Read More